5 business formation terms starting with E: plain-language definitions for founders incorporating across jurisdictions.
Economic Substance is a set of rules requiring companies in low-tax or zero-tax jurisdictions to demonstrate real local activity, including staff, premises, and decision-making, in order to enjoy preferential tax treatment.
Effective Tax Rate is the actual rate of tax a company pays on its accounting or economic profit, reflecting deductions, credits, and timing differences.
Employer Identification Number is a nine-digit federal tax identification number issued by the US Internal Revenue Service to identify a business entity for tax, payroll, and banking purposes.
Enhanced Due Diligence is a stricter level of customer scrutiny applied to higher-risk relationships, typically including source-of-wealth checks and senior management approval.
Estonia e-Residency is a government-issued digital identity from Estonia that gives non-residents secure access to Estonian e-services, including company registration and signing documents online, without granting physical residency or citizenship.
